Customer Relationship Management

The lifeblood of any business are its customer relationships and the lifetime value of customers from one product or service generation to the next. As cost and time pressures impact a business however they often resort to dealing with customers on transactions only, not investing the time in fully understanding their needs. As the text and course have shown, the integration of technologies into customer relationship strategies can deliver significant profitability and long-term company performance gains. The reliance on Customer Relationship Management (CRM) systems and the strategies they enable are revolutionizing businesses by quantifying customer expectations and creating a 360-degree view of each customer (Mukerjee, Singh, 2009). The insights gained from integrating CRM systems into customer relationships also serve as the foundation for greater accuracy and precision in e-commerce, Web analytics, and the creation of more effective self-service strategies as well (Xu, Walton, 2005). CRM’s adoption throughout all industries is predicated on how effective it is in augmenting and strengthening the customer experience, leasing to greater long-term customer value over the long-term (Kim, Mukhopadhyay, 2011). Of the many companies who have successfully implemented CRM to enhance and strengthen their relationships with customers, Virgin America has been the most successful in the airline industry due to their focus on streamlining pre-sales, sales and post-sales of their business (Kirby, Trimble, 2011). In evaluating the impact of technologies on companies, the use of CRM at Virgin America is used as an example of how to do this well. Specifically focusing on how this airline has been able to streamline their Internet-based self-service portal with back-office enterprise systems, all aligned to passengers’ needs, shows best practices in integrating technology to support customers (Kim, Mukhopadhyay, 2011). How Virgin America introduced CRM to its customers is first analyzed, followed by an assessment of how the new CRM system and Web Self-Service Portal added value to the customer experience, leading to greater loyalty and profitability. Third, the support plan Virgin America relied on for their Internet-based self-service portal is also analyzed. Finally the potential new partnerships for Virgin America are presented, in addition to recommendations. All of these factors were orchestrated around excelling at the delivery of an exceptional customer experience for the Virgin America customers, which in turn led to greater profitability over the long-term (Kirby, Trimble, 2011).

Introducing CRM to Customers at Virgin America

One of the most critical aspects of any new technology is creating a foundation of value and trust with customers. The need for ensuring technologies align to their expectations and needs is crucial. Best practices in integrating CRM into customer relationships is to use technology to nurture trust and help customer achieve their goals (Kim, Mukhopadhyay, 2011). Many other airlines fail to take the necessary steps to align their CRM systems and Internet-based self-service portals to the exact requirements of customers, forcing them into workflows that better fit the company’s efficiency goals and not the customers’ (Ko, Kim, Kim, Woo, 2008). Virgin America specifically focused on how to align their Internet self-service portal to the unique approaches their passengers and prospective customers preferred to book flights and check status, not what as more convenient for their internal operations (Kirby, Trimble, 2011). Virgin America respected their passengers and prospective customer’s; time and needs better than any other airline launching Internet-based self-service portals at the time and won more business as a result.

As a first step in this process, Virgin America’s IT department chose to partner with a select group of its most loyal customer’s to get their feedback on the self-service portals’ look, feel and performance over the Web. They also wanted to see if the portal was easy enough to use across the wide spectrum of mobile devices its customers uses, ranging from low-end smartphones, to high-end Android, Blackberry and iPhones including tablet PCs as well (Kirby, Trimble, 2011). All of this testing indicated that the mobile users would require a greatly simplified user interface with two selections to check the status of a flight and also reschedule their existing flight if needed. In summary, the lessons learned from working with customers to gain their feedback helped to ensure the CRM system would meet their needs and align to how they wanted to work with an airline. The result was the highest adoption rate of any Internet-based self-service portal in the airline industry (Kirby, Trimble, 2011).

Measuring how Virgin America was able generate value from their CRM System and Internet Self-Service Portal

Just twelve months from the launch of their Internet self-service portal and expanded e-commerce website, Virgin America was able to capture the highest adoption rate of any airline using e-commerce initiatives (Kirby, Trimble, 2011). Virgin America reported that nearly 70% of all sales were being generated from their self-service portal and e-commerce site, and all that activity is tracked in their CRM system for further planning and strategy development (Kirby, Trimble, 2011). As Richard Branson, founder and CEO of Virgin Enterprises is a very well-known celebrity, he enlisted the help of his A-list celebrity friends to further promote how easy it is to book flights on Virgin America, further driving up the high adoption rate (Kirby, Trimble, 2011). Virgin America also reported that the cost per transaction had dropped significantly while the workflows passengers needed to complete transactions were getting more traffic than anyone had predicted. It is a common occurrence in Internet-based self-service portals to see a drastic reduction on transaction costs, especially in those portals that take the time to align workflows to specific passenger requirements and needs (Adebanjo, 2003). The level of adoption in self-service portals is a direct reflection of hwo easy a company is to work with, and how they elevate the customer to a position of high importance in their system and design strategies (Kim, Mukhopadhyay, 2011). All of these investments in the process workflows of the Internet self-service portal serve as a strong foundation for creating a system of record that the entire CRM system of an enterprise can rely on for planning and strategic execution (Xu, Walton, 2005). Virgin America concentrated on these factors to ensure their passengers and prospective customers both would find value in the Internet self-service portal, contributing massive amounts of data that are in turn used throughout the CRM system Virgin America uses to plan and run their business on (Kirby, Trimble, 2011).

Analyzing The Virgin America Support Plan

The most effective support plans illustrate a thorough understanding of the expectations of customers and create a very solid path to exceeding them, delivering remarkable and memorable experiences in the process. The ability of any company to measure and appreciate the difference between their prospective and current customer’s expectations and experience is a very good measure of how well they are doing from a customer satisfaction perspective, which in turn directly drives market shares (Kotorov, 2002). By taking the steps necessary to define which factors lead to the greatest variation in expectations vs. experiences, companies know which areas to prioritize first in terms of services, support and ongoing customer-driven improvements to their business (Mukerjee, Singh, 2009). This is the methodology Virgin America relied on for creating the foundation of their support plan, working closely with their customer experience management (CEM) and customer service departments (Kirby, Trimble, 2011). Workflows within the self-service area of the portal were designed to handle the majority of customer questions and issues quickly with no need for escalation, while the more complex problems each were designed form a workflows standpoint to support multiple points of escalation (Kirby, Trimble, 2011). All of these efforts in the support plan led to customer’s trusting Virgin America to respond to them. The company had achieved what many others find so difficult to do; they had earned the trust of prospective and current passengers by concentrating on technology as an enabler of greater responsiveness, not an impediment to customers attempting to get what they wanted accomplished.

Assessing Potential Partnerships for Virgin America

Virgin America today has one of the highest-performing Internet web self-service portals in the commercial aviation industry today. There are many, many potential partners for the company to consider, as Virgin America is one of several Virgin Airlines globally, with Virgin Australia and Virgin Atlantic being two equally strong subsidiaries. The potential exists for codesharing flights across the entire network of Virgin Airlines systems, creating the potential for high margin levels while opening up destinations globally. Hotel chains, resorts and even smaller nations whose economies are highly dependent on tourism are all working with Virgin America to create partnerships (Kirby, Trimble, 2011). The focus on how to integrate CRM systems is one that Virgin America often brings up in their partnerships and alliances as well (Kirby, Trimble, 2011). In conjunction with these hospitality providers and smaller nations including Aruba, Jamaica and The Bahamas including many other smaller Caribbean nations, Virgin America is also looking to create alliances with premium credit card companies including American Express, Carte Blanche and others, with…

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